By: DailyForex.com
The GBP/USD printed a daily Hammer, or Pin Bar off of previous highs set back in June when the pair topped out at 1.5751 and the Weekly R1 at 1.5717. Yesterday’s price action made it as high as 1.5717, so a lower high at this point with the Stochastic showing a higher high that June by a fraction. This is what is known as Bearish Divergence and can also be seen using a MACD if that is your preference.
Currently price is sitting on the 50% Fibo level from Decembers Highs at 1.6379 and July’s low of 1.4813, which if broken could see the pair return to the 1.5400 area which also happens to be the 38.2% Fibo level from the same period. A combined Weekly S1/Monthly R1 offer support in between at 1.5480. It is highly probably after the USD was strengthened by yesterday’s FOMC Minutes acknowledged that the Fed will begin tapering in the next few months, that this pair could now fall against the Greenback and other USD pairs seem to be offering up correlation to this over the Asian session.
